If you are like many Americans, you may find that you are spending more than you're saving and steadily going deeper into debt as a result. This is an easy and common pattern to fall into, and you’ll need some careful planning and discipline to reverse it.

The first step is to create a budget by examining your income and expenses to determine exactly how much money you have coming in and how you’re spending it. Once you've got a clear understanding of your current budget, the challenge is to find places where you can spend less (or earn more) in order to achieve your financial goals. Use our Budget Worksheet and follow these steps:

1. Question Your Needs and Wants
What do you want? What do you really need? Evaluate your current financial situation and make two lists — one for needs and one for wants. As you make the list, ask yourself the following:

Why do I want it?

How would things be different if I had it?

Which things are important and essential to me?

When your list is complete, reevaluate what qualifies as a need before making any purchases that will impact your budget.

2. Set Guidelines
Keep your budget balanced with wants and needs by setting clear guidelines. If you splurge on a vacation, consider cutting other costs that month to offset that large expense. Take a look at this Budget Worksheet to get a sense of how to allocate your money for different expenses.

3. Track, Trim and Target
Once you start tracking, you may be surprised to find that you spend hundreds of dollars a month on eating out, entertainment or other discretionary expenses. To lower these costs, target areas where you can cut back on spending. Remember that reducing expenses is often a more realistic approach than cutting costs entirely.